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Jobs says App Store generated $30 million in sales already

When the Apple App Store for the iPhone was first announced, users were very excited about the prospect of being able to add games and extend the functionality of the iPhone via software. Some, however, were not certain that having to buy software to add features many feel should have been included on the iPhone to begin with would prove to be popular.

In June of 2008, an analyst from investment bank Piper Jaffray said that the App Store could prove to be a business worth over $1 billion by 2009. The Wall Street Journal (WSJ) reports that the App Store sold about $30 million in applications after the end of its first full month of sales. In all, Apple CEO Steve Jobs says that over 60 million applications were downloaded from the App Store -- most of them free applications.

If sales remain at the pace the App Store set its first month, Apple would make about $360 million a year. Jobs points out that Apple only gets to keep 30% of the money made from the App Store -- the other 70% goes to the App developers. The WSJ quotes Jobs saying, "This thing's (the App Store) going to crest a half a billion, soon. Who knows, maybe it will be a $1 billion marketplace at some point in time."

The WSJ reports that software developers are surprised by the popularity of their applications for the iPhone. Sega Corp. says that it has already sold over 300,000 copies of its $9.99 Super Monkeyball game in the first 20 days it was available. Sega's U.S. president Simon Jeffery said, "That's a substantial business. It gives iPhone a justifiable claim to being a viable gaming platform."

Apple is looking at the App Store in the same way it looked at selling music for its iPod. Rather than trying to make huge sums of money off applications sold in the App Store -- Apple expects the App Store will drive sales of the iPhone.

Jobs told the WSJ, "Phone differentiation used to be about radios and antennas and things like that. We think, going forward, the phone of the future will be differentiated by software."

Jobs also confirmed for the WSJ that there is in fact a kill switch built-in that will allow Apple to remotely kill and remove any application sold via the App Store from a user's iPhone. Jobs says that Apple needs such an ability in case it inadvertently allowed a malicious application to be sold through the App Store. Jobs said that the kill switch would be needed, for example, if an application were found to be stealing a user's personal data.

Jobs said, "Hopefully we never have to pull that lever, but we would be irresponsible not to have a lever like that to pull."

DailyTech reported last week that a rumor was suggesting that Apple could remotely terminate Apps on the iPhone. Apple also says that it has already removed one application from the App Store called I Am Rich. The application in question sold for $999.99 and did nothing other than display a glowing red gem on the screen of the iPhone.

Creator of the I Am Rich application, Armin Heinrich, says that he thought he followed the rules Apple has for developers when designing his application. An Apple representative said that Apple made a "judgment call" on removing the application from the store. There is no word on whether or not anyone had actually purchased the I Am Rich application, leading to the need to use the kill switch. Apple was also not clear on if consumer who bought applications that were remotely terminated would be refunded the amount of the purchase price.



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So wth
By yacoub on 8/11/2008 3:38:05 PM , Rating: 5
So it sounds like Apple just decided they didn't like his app, and even though it did nothing malicious , they removed it. That's typical Apple for you, I guess, but it's still incredibly lame and anti-entrepreneurial.




RE: So wth
By Chocolate Pi on 8/11/2008 3:41:50 PM , Rating: 5
Nothing malicious? Apple had every right to remove this app, it was blatant copyright infringement of their intellectual property!


RE: So wth
By Bull Dog on 8/11/2008 3:54:08 PM , Rating: 4
Well said mate.

Apple couldn't let other people sell iDiamonds.

The horrors!


RE: So wth
By fotoguy on 8/11/2008 5:44:01 PM , Rating: 1
The application had a red gem on the screen. Assuming it was not a graphic from one of those Gems games, what copyright has he infringed?


RE: So wth
By michael2k on 8/11/2008 7:21:03 PM , Rating: 5
He probably meant overpriced and under-featured.


RE: So wth
By Gul Westfale on 8/11/2008 7:37:08 PM , Rating: 5
those two are apple trademarks, alright!


RE: So wth
By marvdmartian on 8/11/2008 4:16:09 PM , Rating: 5
These apps just go to show you that P.T. Barnum was right all along.....there's a sucker born every minute!

Or, in today's lingo, there's an i-schmuck born every minute!! ;)


RE: So wth
By omnicronx on 8/11/2008 5:00:13 PM , Rating: 2
Whats stupid is someone at Apple had to have allowed the download in the first place... I am pretty sure that apple screens which products they want to add to the apple store.. who was the moron that allowed a 999$ app that does nothing in the first place?


RE: So wth
By michael2k on 8/11/2008 7:29:32 PM , Rating: 2
It was a mistake on Apple's part. They also let the NetShare app in twice, despite it violating AT&T's terms of service.


RE: So wth
By kelmon on 8/13/2008 4:29:41 AM , Rating: 2
I think the problem here is that the application didn't actually breach any of the stated requirements for an iPhone application and the author is perfectly entitled to sell their work for any price they see fit. In this respect Apple can't refuse the application since it was neither pornographic or malware. In the end it was no doubt pulled due to the bad publicity that it generated for obvious reasons. Better QA at the start of the process should have been in place but I suspect that Apple weren't expecting the volume of applications that they've received.

The considerable shame from all this is that, while this useless application was granted acceptance into the App Store, there are a reasonable number of very talented Mac developers still waiting to get accepted into the iPhone developer program. There doesn't seem to be a reason why some developers get accepted and others are still having to wait. Until you get accepted you can't even test your application on your own iPhone but instead have to rely on the SDK's simulator.


RE: So wth
By 4play on 8/11/2008 5:36:20 PM , Rating: 3
Yeah it's complete BS, I was just about to bring out my 'I am richer than "I Am Rich application" application' for $10,000!


RE: So wth
By michael2k on 8/11/2008 7:27:56 PM , Rating: 4
Isn't that their right as a retailer?

Especially if the application IS useless and essentially a scam?


RE: So wth
By Topweasel on 8/13/2008 11:49:19 AM , Rating: 2
It's their right to not sell it. It is not their right to be able to decide they don't like what a company has sold and pull a lever that retro-actively removes it from everyone's phone.


Funny
By FITCamaro on 8/11/2008 4:33:31 PM , Rating: 5
If Microsoft had a phone and such a kill switch built in, they'd be ridiculed so much you'd think they were responsible for the Holocaust.

Apple does it and "Oh yeah....I can see how that might be useful..."




RE: Funny
By tayhimself on 8/11/08, Rating: -1
RE: Funny
By EntreHoras on 8/11/2008 5:27:35 PM , Rating: 5
C'mon. It's not the same and you know it.
The same should be that MS had a kill switch to block any 360 game you have. Like if some day the people at MS said "You know? Maybe this Grand Theft Auto IV game is not suitable to be played in our consoles. Let's kill it"


RE: Funny
By HsiKai on 8/11/2008 7:37:28 PM , Rating: 5
That is an exceedingly poor analogy. If Microsoft had a kill switch to render your X360 games inoperable then it might be a similar problem. Banning you because you cheat or act inappropriately is something that you have to agree to via the Xbox Live EULA. I don't know what the iPhone's EULA says or each individual's application, but it would be nice to have a heads-up as far as Apple's divine right to alter your iPhone without your explicit consent.


RE: Funny
By insurgent on 8/11/2008 9:00:01 PM , Rating: 2
Don't let logic get in the way of an iFan.


RE: Funny
By stinkyj on 8/12/08, Rating: 0
RE: Funny
By CascadingDarkness on 8/12/2008 3:24:47 PM , Rating: 2
Didn't you hear though, enforcing things under the EULA is the wonderful new road we're heading down.
http://www.dailytech.com/Blizzard+Victorious+in+La...


RE: Funny
By michael2k on 8/11/2008 7:37:38 PM , Rating: 2
Just because it can be abused doesn't mean it can't also be useful.

There are plenty of cases in history where something useful has been abused, and vice versa.

Of course it's all Apple's game to screw up now by misuse or abuse.


RE: Funny
By kelmon on 8/13/2008 5:02:00 AM , Rating: 2
Totally agree. I have absolutely no issue with this up until they use the power incorrectly. I can see both sides of this argument and, frankly, both have merits but retaining the power to shutdown an application that turns out to be detrimental, either intentionally or unintentionally, is reasonable. The question remains, however, as to what "detrimental" is defined as in this context...


RE: Funny
By vwgtiron on 8/12/2008 12:16:32 AM , Rating: 2
here here. It had to be said.


Worth 1 billion?
By TheDoc9 on 8/11/2008 6:43:54 PM , Rating: 2
I can't see the app store pulling a billion in sales by next year. I know Jobs has a lot of pull with the appelites but by him saying it I don't even think that HE can make it a self fulfilling prophecy.

People just don't continue to buy apps for their phone, so they'll have to create a new market for this such as the Nintendo Wii did for the different age groups of gamers. As history has shown though if anyone can do the impossible it's apple and nintendo.

The biggest concern here is the price of Monkeyball, the game is 10 years old and they're charging $9.99 for it on a cell phone! That has to be the bankest game saga has ever made.




RE: Worth 1 billion?
By michael2k on 8/11/2008 7:33:31 PM , Rating: 2
I don't know about next year, but can't you see a billion in sales? I mean, iPhone sales have the potential to grow as big as iPod sales (which move, incidentally, 60m a year)

If Apple can sell 10m iPhones a year and two apps per phone (average), that's 20m sales a year. $10 games like Monkeyball, and that's 200m in sales. So when the iPhone hits 50m a year (like the iPod), that's 1b in sales.


RE: Worth 1 billion?
By TheDoc9 on 8/12/2008 2:56:52 PM , Rating: 2
If they manage to continue innovation over the next 3-5 years then 50m in sales per year might be possible. Over that time frame though, what will the competition be doing to counter Apple.


RE: Worth 1 billion?
By michael2k on 8/12/2008 5:01:59 PM , Rating: 3
Probably the exact same thing the competition did to counter the growth of the iPod or the iTunes store...

Nothing. If the competition were up to the challenge in the first place, the iPhone would never have been necessary to be invented.


Cant Wait
By ZimZum on 8/11/2008 4:23:45 PM , Rating: 3
Cant wait till the iRiver Spinn is available in the states so I can ditch the ipod. And be done with all of the apple Itunes/Quicktime bloatware. I like apple better when they were just a small company who overcharged trend-whores for PCs.




RE: Cant Wait
By sprockkets on 8/11/2008 4:46:15 PM , Rating: 2
Yeah, the only people who use quicktime (not to be confused with qt :)) is Apple's web site, and how they stream their bogus commericals.

So glad that POS program is left to die. HD quicktime? Don't need that either!


RE: Cant Wait
By kelmon on 8/13/2008 5:08:03 AM , Rating: 2
Well, all movie trailers seem to be in QuickTime format, plus it's a fairly standard format for video capture. But still, I don't see what's wrong with the format or the software. Works great for me.


I Am Richer
By kyleb2112 on 8/11/2008 5:58:19 PM , Rating: 2
I Am Rich just shot way up in value. Some would buy that just to show off their money. And now it's BANNED!




RE: I Am Richer
By KernD on 8/11/2008 11:42:12 PM , Rating: 2
Yea, that's dumb of them to do that, after all that's what they do, sell high price electronic and computer so people can buy them to show off.


What?
By sprockkets on 8/11/2008 4:11:28 PM , Rating: 1
If an app is malicious, you can't just inform the person that it is and give them the dignity of removing it?

According to the inq, they said someone did for fun buy the $999 app and didn't know by accident they had it set for one click buying or whatever.

Maybe he had his app removed, but not before making $700 :) He will never get it though.

Oh well, Apple makes great products, while adding that one or so feature that always shoots them in the foot.

Everyone makes a big deal though about the app store. Palm and the Windows Mobile OS were doing this for ages before Apple. They just didn't need an iStore to do it with.




RE: What?
By fotoguy on 8/11/2008 5:49:34 PM , Rating: 2
I was with you until the last sentence.
Both Palm and Microsoft do not force you to only buy apps for your handheld through their App Stores. They have never censored what you could buy for your handheld.
Do you have any examples of software either of them have prevented people from installing?


Poor M$ people
By hiscross on 8/11/08, Rating: -1
RE: Poor M$ people
By HsiKai on 8/11/2008 7:42:54 PM , Rating: 2
If you ain't making dollars, you ain't making sense. And you sir, are penniless.

If you want to reply to someone's opinion, in this case FIT's, then click on "reply" under his post. Still, he's right and you did yourself a great disservice trying to insult PC users without making a valid point.


RE: Poor M$ people
By INeedCache on 8/11/2008 7:44:18 PM , Rating: 2
That "M$" stuff is so old and lame. For what Apple charges for its stuff, the dollar sign is more appropriate for them. It's just too bad they don't have an "S" in their name to mess with. I guess we'll just have to settle for Job$.


RE: Poor M$ people
By EntreHoras on 8/12/2008 7:40:55 AM , Rating: 3
There is no "s" in Apple, but there is an "l" and an "e", so: APP£€


RE: Poor M$ people
By hiscross on 8/11/08, Rating: -1
RE: Poor M$ people
By vwgtiron on 8/12/2008 12:33:21 AM , Rating: 3
I gotta say that the truth is in the pudding and I quote
quote:
"It sounds like a large number of units, but actually, it's less than about a month's worth of a run-rate," he said. Lees cited IDC data indicating that Windows Mobile unit sales have grown faster than the overall market, expanding from slightly more than 11 percent to just under 13 percent of the worldwide market for "converged devices," better known as smartphones. The company also cites IDC data showing that Windows Mobile devices have outpaced Research in Motion's unit sales in the past four quarters, and sold more than twice as many as Apple. RIM and Apple offer both software and mobile phones, while Windows Mobile comes on phones made by independent device manufacturers. Microsoft released Windows Mobile 6.1, with a streamlined user interface, in April, and a series of device manufacturers have come out with new and upgraded phones based on it. Devices using the new version include the HTC Touch Diamond, the HTC Touch Pro, and the Samsung Omnia. Devices coming out later include the Sony Ericsson Xperia X1. Windows Mobile is "well poised for the future," Lees said


Not to bad for someone who doesn't even produce the handset they just make microdollars off the licensing of the handset and software. Hmmm who has the better business model?
Any questions?


RE: Poor M$ people
By hiscross on 8/12/08, Rating: 0
RE: Poor M$ people
By michael2k on 8/12/2008 5:23:18 PM , Rating: 2
Come back in a year. Apple just doubled the sales of last quarter in a single month and are set to unveil in an additional 20 countries at the end of the month (which probably means another doubling of sales).

Or, in other words, by this time next year Apple could very well have caught up to WinMo.


RE: Poor M$ people
By kelmon on 8/13/2008 5:21:20 AM , Rating: 2
I think I speak for everyone here when I tell you to go away. If you insist on staying and posting nonsense, here's a couple of tips for the future:

1. It's "MS", "Microsoft" or "Microsoft Corporation", if you want to get really specific. "M$" has never been funny and given that Apple made almost $7.5 billion in the last quarter, I think it's hard to suggest that Apple is some sort of charity while Microsoft is a version of Scrooge McDuck.

2. Steve Ballmer is not anyone's god in much the same way as Steve Jobs is not the second coming of christ. The only reason anyone would bow before Ballmer is to avoid the flying chair...

With respect to Microsoft's intentions for the mobile phone industry, I'd be interested to see what results from the rumored relationship between them and Nokia. Microsoft are very capable of building a good software platform and Nokia obviously know what they are doing with hardware. Whether they need to do anything is going to depend on how the iPhone does over the next few months and whether it really is a serious threat to both of them.


RE: Poor M$ people
By hiscross on 8/13/08, Rating: 0
RE: Poor M$ people
By kelmon on 8/14/2008 4:55:32 AM , Rating: 2
Oh, so close. I guess you haven't been here long. I'm a 100% Mac user but just hate to see people posting rubbish regardless as to whether they are pro-Windows, Apple, Linux, Whatever. It's not a case of getting "wound up" but rather correcting mistakes so that hopefully people learn. FUD is FUD until it is dispelled.

You and Pirks should get along marvelously.


"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone














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